Gartner Research

Decision-Making Principles Drive Quality and Efficiency Through Disruption

Published: 13 August 2020

ID: G00731409

Analyst(s): Quality Research Team

Summary

Favoring speed over high standards, or now over later, presents a false dichotomy. Functional leaders should be clear upfront about how to weigh choices so employees, whether they are on the front line or within a specific function, understand what to do.

Upheaval is hard on teams — a torrent of new expectations typically lessens emphasis on quality throughout the enterprise, and brush fires take focus away from planned long-term change to better serve the business.

But favoring speed over high standards, or now over later, presents a false dichotomy. Pathing employees to more efficient solutions helps avoid trade-offs. But when trade-offs are necessary, explain how and when to weigh choices so employees, whether they are on the front line or within a specific function, can understand what to do. Where should they compromise? When should they hold fast? Decision principles can help them do what they need, and what the organization needs, without escalating. They can have both — each at the right time and place.

When a disruption hits, employees feel like quality conflicts with new expectations and see others evading quality guidelines. In fact, a single disruption, on average, reduces employee emphasis on quality by 9%, based on our recent analysis of over 1,200 global employees across functions, industries and levels of seniority (see Figure 1). That decrease is especially concerning considering employees have been experiencing three disruptions per year, and the pandemic has led to a near-constant state of interrupted focus.

Figure 1: Impact of Disruptions on Culture of Quality

During the best of times, a strong culture of quality is beneficial. Employees who work in a strong culture of quality experience 65% fewer mistakes in their daily work than their peers do — saving their companies time and money.

And during disruptions, a strong culture of quality can be a competitive advantage. When a culture of quality is strong, employees aren’t simply following established rules and processes. They take quality-centered actions independently and adapt to changing conditions around them. It’s no surprise, then, that those who work in a strong culture of quality are 3.5 times more likely to overperform individual goals — and their companies are 3.4 times more likely to overperform enterprise goals during a disruption, as well.

During disruption, executives tend to turn to an old standby: reinforcing the importance of excellence. There’s nothing wrong with that. It just has no impact. Why? Because in a disruption, employees are flooded with communication. More than 70% of employees say messages about multiple, competing priorities all increased during a disruption.

Another common way to shore up quality is access to processes, training and data. But as priorities and circumstances change, employees begin to question whether the tools are still relevant — and some will stop using them.

The most effective tactic by far is helping employees navigate tensions (see Figure 2). Conflicting signals, changing expectations and new circumstances distort the internal calculus employees use to determine the right balance of quality versus other priorities, such as speed and cost. As a result, employees are paralyzed by indecision when faced with an unclear situation involving these competing concerns — something over 60% of employees experience at least weekly during a disruption.

Figure 2: Improvement in Culture of Quality During Disruptions From Various Approaches

Three simple but powerful actions can support decision making:

1. Acknowledge Tensions: One pharmaceutical company forced executives to decide during a workshop between two equally important yet competing priorities. Once aligned, leaders could be more transparent with employees about the necessary trade-offs and expectations that they make them.

2. Build Judgment: To build this muscle in a safe environment, the insurance company Aviva uses an online game that asks employees to make a difficult trade-off in a real-life business scenario and provides instant feedback on that choice.

3. Clarify Trade-Offs: Executives should help employees understand when quality is crucial and when it is not. It’s impossible to determine this for every possible scenario, but guidance can be as simple as helping employees think about three levels:

  • Must have quality — when quality is non-negotiable (e.g., customer safety)

  • Should have quality — when quality needs to be balanced against other priorities critical to the business

  • Could have quality — when quality is less of a priority

Legal departments serve as the firefighting function within most organizations. When crises hit, legal is always at the table and often leading the response. And these departments are under siege right now. In the wake of the pandemic and ensuing recession, one general counsel said an influx of novel legal questions combined with the work-from-home environment made her feel like her team has 50% more work, but 50% less time.

Indeed, 74% of corporate counsel reported feeling at least moderately burnt out in a June flash poll by the Association of Corporate Counsel. To manage legal work and support the business through the pandemic, legal leaders have retasked lawyers and reallocated funds, and they have scoped down, paused or canceled other work where possible.

Such a whirlwind of adjustments isn’t unique to COVID-19 response. In other matters too, 63% of legal teams pull resources from other workstreams to support unplanned work. That parade of trade-offs is not sustainable. Legal cannot forever put off transformation that will allow it to support the business of the future in order to support the crises of the present.

Some legal leaders believe this trade-off is unfortunate but inevitable, that when they get hit with an avalanche of high-urgency work, they must bring all hands on deck and swarm the issue to protect the business.

In the process, however, lawyers spend too much time and money on overanalysis, duplicate work, reworking law firm guidance and mismanaging outside counsel spend. Overall, 1,040 hours a year for every 10 FTEs is wasted in response to unplanned work. That is 20% of the time spent on the unexpected — and time is in short supply.

Managing that time better means conserving the ability to protect the company now — as well as in the future. Legal departments that are efficient in unplanned work are about twice as likely to have implemented plans for legal transformation and to have increased the speed at which they provide legal advice.

Based on more than 60 interviews, we found that leaders typically aim to increase efficiency in unplanned work by getting closer to the business, so legal can anticipate issues that may arise and identify issues sooner when they do occur. The reasoning is this: Legal can avoid inefficient last-minute work and even plan ahead for potential emerging issues.

Providing decision principles for unplanned work has more than double the impact than early identification of emerging issues (See Figure 3). This makes sense. Early identification is hard. Several general counsel told us that even though their organizations had pandemic plans, they could not make use of them.

Figure 3: Impact of Approaches on Unplanned Work Efficiency

Decision principles are effective because they make expectations clear without stifling individual judgment. These guidelines are useful across a broad range of issues because they provide repeatable, scalable guardrails that remove uncertainty and overconservatism — a common problem in legal departments. These guardrails help develop lawyers’ judgment skills and create consistency, which reduces unnecessary escalation and limits shopping for favorable legal guidance (see Figure 4).

Thus, legal departments that achieve efficiency by providing their lawyers with decision principles will trade off department priorities less often when unplanned work strikes.

Figure 4: Why Decision Principles Elicit Greater Efficiency in Unplanned Work

Within legal departments, decision principles fall into two categories: those relating to the risk tolerance of the business and those that guide lawyers in resourcing decisions. For maximum benefit, legal leaders should provide a full gamut of principles in these areas, but only 29% do.

To create decision principles for unplanned work, legal leaders should:

1. Establish, iterate and codify risk tolerance based on strategic objectives. When unplanned work arises, risk tolerance can change quickly and often. In the absence of decision principles, ad hoc decision making can lead to excess iteration and rework. Lawyers can gather too much subject matter expertise — too much attention to quality — and deliver overly conservative guidance.

Because quality for legal means avoiding the right risks while enabling strategic outcomes, the “must-have quality” guidance should come in the form of “must avoid outcomes” (MAOs). MAOs are high-level scenarios that would keep a company from achieving strategic objectives. They allow lawyers to identify must-have quality — appropriate risk tolerance — in their guidance to the business. To develop MAOs, legal leaders should agree on key strategic objectives with business partners and brainstorm potential outcomes that would constitute threats. Examples include loss of license to operate in a jurisdiction or noncompliance with a consent order with a primary regulator. To implement MAOs, leaders should select a risk advocate within the legal department who can coordinate positions on related emerging issues and serve as the legal point of contact and expert for other functions. This helps align baseline risk tolerance across a range of issues, and it enables quick identification of necessary stakeholders and coordination of goals.

2. Provide lawyers with easy-to-use guidelines for resourcing decisions so they can manage and produce high-quality unplanned work. Lawyers resist stringent resource constraints because they feel these will adversely affect the quality of their work. But they can spend time on work that doesn’t require legal skills when others have spare capacity. They can also default to their go-to resources, missing opportunities to reduce costs or use more relevant resources. Legal leaders should provide lawyers with easy-to-use guidelines for maintaining quality that will make work easier, building buy-in to make working with legal’s preferred resources the path of least resistance.

Unplanned issues may themselves be unique, but often the tasks that constitute a response are common to a whole host of them. Legal leaders should identify trends and discuss resourcing requirements based on the knowledge and experience needed for those common activities. They should then map out existing providers and align them to resourcing requirements for these assignments. The final step is to identify gaps in providers for future investment.

by Bryan Klein and James Crocker

Contact Bryan with comments or questions about quality and the workforce. Contact James with comments or questions about legal efficiency.

This article is from the .

Recommended by the Authors

Legal departments often steal resources from transformation projects to manage their unplanned work, but doing so hurts their long-term ability to meet evolving business needs. Instead, legal departments must improve their efficiency in unplanned work so they can manage risk without sacrificing key priorities.

By facilitating regular conversation on the right risk posture, general counsel clarify the organization’s risk-taking needs and enable lawyers to provide risk-aligned guidance. OhioHealth does this by creating a channel for legal to escalate gray area issues.

Legal leaders can use this guide to identify the questions to ask legal staff about their work, the tactics to use for collecting workload information and how to interpret workload analysis results. The result is a better understanding of the legal department workload as a first step to increasing department efficiency.

Disruptions like mergers and acquisitions, business model changes and cost cutting initiatives are on the rise. To sustain a strong culture of quality, companies need to go beyond tried-and-true approaches and help employees make sense of constantly changing priorities.

Endnotes

2020 Culture of Quality During Disruptions Survey

2019 Culture of Quality Diagnostic Benchmark

“COVID-19 Flash Poll Series: Wellness,” Association of Corporate Counsel

2020 Gartner Legal Department Projects Panel Survey

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